20250508Staff Comments.pdf

RECEIVED
Thursday, May 08, 2025
ERIKA K. MELANSON IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 11560
Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF AVISTA CORPORATION FOR AN ) CASE NOS. AVU-E-25-03
ACCOUNTING ORDER AUTHORIZING ) and AVU-G-25-02
ACCOUNTING AND RATEMAKING )
TREATMENT OF COSTS ASSOCIATED ) COMMENTS OF THE
WITH TARIFFS LEVIED ON CANADIAN ) COMMISSION STAFF
ENERGY IMPORTS )
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its Attorney of record, Erika K. Melanson, Deputy Attorney
General, submits the following comments.
BACKGROUND
On March 4, 2025, Avista Corporation, doing business as Avista Utilities ("Company")
filed an application("Application") with the Commission requesting an order authorizing the
Company to utilize deferred accounting for the potential impact of United States tariffs on
energy resources imported from Canada, and for electric operations to defer those expenses for
recovery in the Power Cost Adjustment ("PCA") at 100%. Application at 1.
The Company represents that it is not clear whether such tariffs would be reflected in the
embedded cost of the Canadian commodity and flow through the Company's natural gas
STAFF COMMENTS 1 MAY 8, 2025

Purchased Gas Cost Adjustment Mechanism ("PGA") or electric PCA; or alternatively be
considered something similar to an excise tax. Application at 1. The Company seeks deferral
treatment of any imposed tariff. Id. at 1-2.
The Company seeks accounting treatment for any costs associated with tariffs imposed
on Canadian imports. Id. at 5. The Company represents that any identifiable costs associated
with those tariffs that do not otherwise flow through the various Federal Energy Regulatory
Commission ("FERC") accounts tracked in the PGA or PCA, would be charged to FERC
Accounts 408.1 and 408.2, with the associated treatment. Id. at 6.
The Company indicates that when it is not possible to determine the exact amounts of
taxes, the amounts shall be estimated and adjustments made in current accruals as the actual tax
levies become known, and the Company proposes to defer those amounts to FERC Account
182.3. Id.
The Company proposes, for electric operations, that any deferred costs charged to the
accounts above be recovered at 100%, and that they not be subject to the deadband nor sharing
bands. Id. The Company also requests that any direct, identifiable, tariff costs that flow through
the PCA be separately tracked and likewise be deferred at 100%. Id. The Company represents
that interest would accrue in the same manner as is authorized for the PGA or the PCA. Id.
STAFF ANALYSIS
Staff reviewed the Company's Application and is supportive of the Company's request.
As noted in its Application, the Company is requesting authority to defer the expenses due to the
levying of tariffs by the United States on energy resources imported from Canada.
For natural gas operations, the Company purchases natural gas for distribution customers
in wholesale markets at multiple supply basins in the western United States and western Canada.
Approximately 90% of the natural gas the Company purchases is from Canadian-sourced natural
gas. The majority of natural gas is purchased at AECO, which the Company represents has
traditionally been one of the lowest priced natural trading hubs. Application at 3. The Company
further represents that even with the proposed tariffs, natural gas prices at AECO are still below
any alternative, and is the lowest cost resource for customers. Id. Staff s analysis in the
Company's annual PGA filings confirms that prices for natural gas at the AECO supply basin is
typically lower than other basins in which the Company has access to. For electric operations,
STAFF COMMENTS 2 MAY 8, 2025

the Company purchases natural gas from various supply basins to fuel its natural gas turbines.
When the Company has excess capacity available, it can sell low cost Canadian-sourced natural
gas into United States market at a premium, which provides benefits to customers through the
PCA.
Staff reviewed the invoices for natural gas imports for March 2025, where the tariff was
in effect for three days, March 4-6, 2025. The invoices provided a day-by-day report of
imported natural gas for the Company's whole system and calculated the 10%tariff on only
those three days. The invoices captured the necessary data and calculated the additional tariff
imposed, which totaled $130,363.90 (system) for the three days. The additional tariff amounts
were not contemplated by the Company and not included in the power supply expenses in the
Company's last general rate case where the net power supply base was set. Without an
accounting order, the Company would be unable to recover the additional cost of the tariff if it
were to be considered the importer of Canadian-sourced natural gas.
The Company proposes recording the deferred tariffs monthly into FERC Accounts:
182.3 (Regulatory Asset-Deferred Costs) and 407.4 (Regulatory Credit-Deferred Costs). Staff
believes that the Company's proposed accounting treatment for the tariff on energy resources
imported from Canada is reasonable and should be approved by the Commission, and that the
Company should be allowed to track and defer any direct, identifiable tariff costs for 100%
recovery in the PCA and PGA.
STAFF RECOMMENDATION
Staff recommends approval of the Company's request for an accounting order
authorizing deferral of expenses due to the levying of tariffs by the United States on energy
resources imported from Canada.
Staff recommends the Commission authorize the Company to defer and record the tariff
and additional costs in a subaccount of FERC Account 182.3-Other Regulatory Assets.
Additionally, Staff recommends that the Company be allowed to recover 100% of any direct,
identifiable tariff costs that are verified and approved as prudent and accrue interest in the same
manner as allowed in the PCA and PGA.
STAFF COMMENTS 3 MAY 8, 2025

Respectfully submitted this 8th day of May 2025.
Erika K. Melanson
Deputy Attorney General
Technical Staff. Leena Gilman
1:\Utility\UMISC\COMMENTS\AVU-E-25-03 and AVU-G-25-02 Comments.docx
STAFF COMMENTS 4 MAY 8, 2025

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS DAY OF MAY 2025,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF , IN CASE
NO. AVU-E-25-03 AND CASE NO. AVU-G-25-02, BY E-MAILING A COPY THEREOF
TO THE FOLLOWING:
DAVID J MEYER PATRICK EHRBAR
VP & CHIEF COUNSEL DIRECTOR OF REGULATORY AFFAIRS
AVISTA CORPORATION AVISTA CORPORATION
PO BOX 3727 PO BOX 3727
SPOKANE WA 99220-3727 SPOKANE WA 99220-3727
E-mail: david.meyergavistacorp.com E-mail: patrick.ehrbargavistacorp.com
avistadockets(a,avistacop2 com
PA RICIA JORDAN, E ETARY
CERTIFICATE OF SERVICE